The cryptocurrency market has recently made a fresh attempt at recovery following a brutal couple of weeks. The Bitcoin price dropped below $25,000 after the U.S. Federal Reserve’s decision on interest rates. Many believed that the pause on interest rate hikes would be good news for risk assets such as Bitcoin; however, Chair Jerome Powell’s remarks paved the way for a potential increase in interest rates, leading to a sell-off in the market.
Despite this setback, the Federal Reserve remains determined to lower inflation to 2%. Bitcoin has since bounced back from its low of $24,700 and is currently trading at $25,500 according to data from CoinGape. Contributing factors to Bitcoin’s recovery include the extremely oversold conditions, as well as the recent announcement of Blackrock filing for a spot Bitcoin exchange-traded fund (ETF).
This development signifies that a significant player has entered the market, and the ongoing regulation dispute seems to be unfolding positively. Blackrock’s move is the first step toward one of the most sought-after regulatory approvals in the crypto industry. If the Securities and Exchange Commission (SEC) grants approval, the ETF would provide an accessible means for investors to gain exposure to cryptocurrency through a Wall Street heavyweight.
However, the SEC has yet to approve a spot Bitcoin ETF in the United States. The regulatory body is currently embroiled in legal proceedings with Grayscale regarding the firm’s pursuit of converting its Grayscale Bitcoin Trust into an ETF. The outcome of this issue should materialize later in the year.
In light of Blackrock’s filing, the value of Bitcoin increased to just over $25,500. Increased trading volume, according to the On-Balance-Volume (OBV) indicator, also favors a continued market recovery, potentially approaching the $28,000 mark.
Nevertheless, the technical market structure remains relatively weak, and Bitcoin traders should be wary of bull traps if resistance at $26,000 stays unclaimed. In addition, short-term support at $25,400 should remain intact to mitigate the likelihood of another downtrend. Traders must keep the next buyer congestion, $24,700, in mind, as this value could determine whether Bitcoin dips to $20,000 or maintains an upward trajectory.
In conclusion, the cryptocurrency market is demonstrating signs of recovery, driven by factors such as regulatory advancements and recent market filings. With Bitcoin hovering at approximately $25,500, a cautious yet optimistic outlook among traders may ultimately help drive the market forward. However, it is essential for investors to remain vigilant in navigating these uncertain market conditions and follow developments closely.
Source: Coingape
